Ohio Municipal League
175 South Third Street
Suite 510
Columbus, Ohio 43215

614-221-4349 Office
614-221-4390 Fax

email:
Legislative Inquiries
John Mahoney
General Inquiries
info@omunileague.org

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OML E- BULLETIN
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PLEASE CIRCULATE THIS BULLETIN TO YOUR COUNCIL, DEPARTMENT HEADS & STAFF

An Opportunity to Stand Up for Home Rule.

An interesting hearing was held this week. It was held because the city of Dayton passed an ordinance. That ordinance banning some "predatory lending" practices from the city was disliked, to use a mild term, by the financial institutions community (consumer finance companies, banks, credit unions, S&L's and the like). HB 386 was introduced to help those financial institutions by telling the city of Dayton and any other city that it couldn't do what Dayton did. The bill says only the state can pass regulations about consumer finance, even if the state chooses not to regulate consumer finance or "predatory lending" practices.

Note that the industry did not go to the General Assembly to ask for "predatory lending" regulations by the state that would put Dayton's ordinance in conflict and legitimately nullify the Dayton ordinance. Instead they asked the state to not do anything in this area and merely tell all municipalities they can't do what the state isn't doing.

In a state without constitutional Home Rule, that might be just ducky. Unfortunately for the industry, Ohio is a strong Home Rule state in which municipalities can regulate what the state does not and a state in which co-regulation by the state and municipalities is permitted. The state cannot just order your municipality out of a field of regulation by fiat, which HB 386 attempts to do. In that very real and important sense, HB 386 is not about "predatory lending" or about the city of Dayton. It is about the Home Rule powers of every city and village in Ohio!

The consumer finance industry, evidently, thinks HB 386 will turn off the spigot of ordinances related to "predatory lending," as well as help the industry's case in court against the city of Dayton's ordinance. On the court side, the city will no doubt ably take care of itself. And, at the appropriate time, should the city wish the League's help through an amicus brief, we will certainly be open to that request.

However, you can help stand up for Home Rule by showing that a legislative fiat will not deter your city or village from taking up issues that the state fails to address. You can stand up for Home Rule by at least publicly considering the adoption of the Dayton "anti-predatory lending" ordinance or a variation of that ordinance in your community. As always, we would ask you to consider this after due consultation with your Law Director or Village Solicitor.

In many communities your public consideration may lead to a conclusion that this type of consumer protection is not necessary in their city or village. In other communities, a majority of council may believe having this ordinance on the books is helpful and should be done. In either case, whether you pass it or not, that public consideration will send a strong education message on the regulatory relationship between state and municipal government in Ohio.

Through this public clarification and reaffirmation of one of the essential elements of Home Rule in Ohio, you can make it clear that the state's regulations end where they end not where some industry, through statute, says they would like them to end. We know this request from us is highly unusual, but the direct attempt to thwart Home Rule through HB 386 demands that we strongly urge you to undergo this very special public education effort.

The consumer finance industry and many legislators argue that, whether the practices regulated in the Dayton ordinance ought to be legal or not, they shouldn't be regulated by several hundred local ordinances. They should be regulated by the state. We think that very reasonable. However, HB 386 does not do that. Instead it says that only the state can regulate these practices and no one else can, even if the state chooses not to offer the public this kind of consumer protection. We need you to demonstrate, through consideration of the Dayton ordinance, that the state's inaction on this or any other regulatory issue will not deter municipalities from exercising their right under Home Rule to help the citizens of their city or village. The consumer finance industry has directly challenged your right to consider offering that help. If they are successful without you responding strongly, other industries will follow this same path.

Please, help! The Dayton ordinance is available on the League's website (omunileague.org) or you can call us and we'll be happy to send you a copy.

HB 386 passed through the full House this week and will now go to the Senate for its consideration.

We will continue following HB 329 and work with both sides to try to achieve as much fairness in this bill as possible.

Local Government Immunity

On Wednesday, October 17^th, the Senate State and Local Government and Veterans Affairs Committee unanimously voted out Sub SB 106. Sub SB 106, sponsored by Sen. Hottinger (R, Newark) restores order to those local government immunity and liability statutes which were invalidated by the Ohio Supreme Court merely on single subject grounds rather than the substance of the law. This sixth hearing was no less contentious than the ones preceeding it. Strong opposition to the bill came from the Ohio Academy of Trial Attorneys who seemed to be questioning the motives of local government witnesses and officials supporting the proposal.

Among the changes made is a clarification of the provision pertaining to premises liability to clearly limit the application of the section to defects in the premises due to negligence and to exclude negligent conduct on public grounds and in public buildings. Conduct which is negligent will still be controlled by other provisions of the sovereign immunity statutes contrary to the plaintiffs bar arguments.

The bill will be on the Senate Floor for a vote in November. It is URGENT that you contact your Senator and Senate leadership supporting a yes vote on Sub SB 106.

Please note that there has been a change in composition of the Senate State and Local Government and Veterans Affairs Committee. (Coughlin (Chr.), Mumper (Vice Chair), Mead, Gardner, Goodman, Jordan, McLin, Furney, Shoemaker). You may wish to thank them for supporting local governments on this issue.

PLEASE NOTE: THE COMMITTEE WAS INQUIRING WHAT OTHER CITIES AND VILLAGES WOULD BE FACING FINANCIALLY. TO ANSWER THIS QUESTION IF YOU COULD HAVE SOMEONE DO SOME CALCULATIONS OF YOUR FINANCES MINUS THE REVENUE OF THE ESTATE TAX AND GET THE INFORMATION TO THE LEAGUE'S OFFICES IT WOULD BE GREATLY APPRECIATED. OUR FAX NUMBER IS 614-221-4390 & EMAIL IS OMUNILEAGUE.ORG@COPPER.NET.